TerrAscend (TER) Q2 2025 earnings summary

Executive summary

• Exited the Michigan market to focus on more profitable Northeast geographies, with the exit expected to complete in the second half of 2025 and proceeds used to pay down debt.

• Maintained market leadership in New Jersey, achieved strong growth in Maryland and Pennsylvania, and entered Ohio with the Ratio Cannabis acquisition.

• Completed significant cultivation and manufacturing expansions in Maryland and New Jersey to support growth.

• Announced and executed targeted M&A, including the acquisition of Union Chill/Union Shield Dispensary in New Jersey and Ratio Cannabis in Ohio, with further expansion planned.

• Leadership transition with the departure of the CFO and appointment of an interim CFO.

Financial highlights

• Q2 2025 net revenue from continuing operations was $65.0 million, down from $67.2 million year-over-year.

• Gross profit margin improved to 51.1%, up 150 basis points year-over-year.

• Adjusted EBITDA from continuing operations was $16.0 million (24.6% margin), compared to $17.3 million (25.7%) a year ago.

• GAAP net loss from continuing operations was $6.4 million, similar to $6.3 million in Q2 2024.

• Positive cash flow from continuing operations for the 12th consecutive quarter ($7.3 million) and positive free cash flow for the 8th consecutive quarter ($5.0 million).

• CapEx spending was $2.3 million, mainly for Maryland and New Jersey expansions.

Outlook and guidance

• Q3 2025 revenue expected to be flat to up low single digits sequentially, with slightly higher gross profit margin and further G&A expense reductions.

• Plans to sign multiple additional transactions in New Jersey by year-end and continue disciplined M&A.

• Well-positioned for potential adult use legalization in Pennsylvania, with capacity ready to meet increased demand.

• Focus remains on expanding in core Northeast markets and executing accretive acquisitions.